The move by American multinational investment management firm BlackRock to file for a spot Bitcoin Exchange Traded Fund (ETF) with the United States Securities and Exchange Commission (SEC) has sparked mixed reactions in the cryptocurrency industry. While some experts suggest this could pave the way for further ETF products and benefit existing trusts, others question whether the SEC will approve the application or not.
One possible beneficiary of a BlackRock spot Bitcoin ETF, if approved, would be the Grayscale Bitcoin Trust (GBTC). Top market analyst Adam Cochran believes that the approval of BlackRock’s product would set a major precedent and be more beneficial to Grayscale. This is because Grayscale has previously sought to convert its Bitcoin Trust product into a full-fledged spot Bitcoin ETF product, only for the SEC to reject the proposal.
With BlackRock’s filing technically being a trust that would function like a Bitcoin ETF, its approval could set the tone for Grayscale to double down on its case, particularly as it has already dragged the market regulator to court following the refusal of the GBTC conversion to a Bitcoin ETF. According to Cochran, BlackRock’s approval “will show the path to conversion, and GBTC’s 40%+ discount will resolve on top of industry growth.”
However, not everyone is convinced that the SEC will give the green light to BlackRock’s application. Some experts argue that BlackRock CEO, Larry Fink, has strong connections within the Democratic Party and may be able to use this influence to sway the market regulator. The cryptocurrency industry is eagerly awaiting the outcome of the application, as the first spot Bitcoin ETF could potentially be on its way.
BlackRock, one of America’s largest financial institutions, has about $10 trillion in Assets Under Management (AUM). Notably, the company has an impressive 99% success rate with its previous applications for Exchange Traded Funds (ETFs).
An approval for BlackRock’s ETF would undoubtedly be a significant milestone for the cryptocurrency ecosystem in the United States. However, it remains unclear whether the SEC will approve the product, despite BlackRock’s impeccable ETF track record and the influence of its CEO. As with any investment, it’s crucial to do thorough market research and consider the potential risks involved.
Source: Coingape
